Forex Today: U.S. & E.U. Stocks Reach Record Highs

  • Major U.S. and E.U. equity indices reached new record highs yesterday on healthy volatility, as markets reopened after the Easter holiday. It is likely that Friday’s strong NFP data from the U.S. contributed to stronger risk-on sentiment which boosted equity markets, although Asian indices are mostly not showing similar price advances.

man sitting in front of the laptop

  • After a period of protracted strength, the U.S. dollar fell yesterday, but remains in a long-term bullish trend. It is unclear whether we are seeing a trend reversal in the greenback or simply counter-trend movement. The British pound is relatively strong while the Japanese yen is still showing relative weakness (UDN, FXB).
  • The Reserve Bank of Australia’s Rate Statement contained no real surprises, reiterating that rates will not be raised until inflation reaches the 2% to 3% range while estimating this will not happen until 2024 at the earliest. The Aussie was little affected by the release (FXA).
  • U.S. Treasuries edged up yesterday, sending yields a little lower, indicating an increase in risk appetite (SPTL).
  • New coronavirus cases are rising globally for the sixth consecutive week, and deaths also increased last week for the third week running after falling for months, signifying a rebound in the pandemic in areas where vaccinations are relatively absent. The increase is especially pronounced in Latin America (accounting for 42% of deaths) and Europe (accounting for 35% of deaths). The situation is particularly bad in Brazil which has suffered more than 66k deaths in March alone.
  • Total confirmed new coronavirus cases worldwide stand at over 132.4 million with an average case fatality rate of 2.17%.
  • The fastest progression in terms of immunizing a population against the coronavirus in all but the smallest states has been in Israel, which has given at least one shot to 61% of its entire population followed by the U.K. at 43%. For most of the world, a vaccine remains distant. Progress remains slow in the hard-hit European Union with only one member state (Hungary) having yet immunized more than 15% (EZU).
  • The rate of new coronavirus infections appears to now be increasing most quickly in Andorra, Argentina, Armenia, Austria, Azerbaijan, Bahamas, Bahrain, Bangladesh, Belarus, Bosnia, Canada, Chile, Colombia, Croatia, Cuba, Cyprus, Djibouti, Egypt, Ethiopia, Greece, India, Iran, Iraq, Japan, Kazakhstan, South Korea, Lithuania, Luxembourg, Mali, Mongolia, Mauritius, Netherlands, North Macedonia, Philippines, Qatar, Serbia, Slovenia, Switzerland, Tunisia, Turkey, Ukraine, Uruguay, the U.A.E. and the United States.

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